Open Source Business Models Kelly Puth Melanie Edmondson

What is Open Source? “Open Source is most commonly applied to software. Users are given or can obtain the original source code from which a computer program is compiled. It also includes a license allowing users to use, modify, and redistribute the code”.

Open Source Similar to Wikipedia Open Source has the same concept as Wikipedia where it allows anybody to modify or add to the article. With Open Source anybody can edit the software or create addition elements. This allows people to fix “bugs”/glitches in the system.

How do Businesses Make Money with Open Source? MySQL offers the initial free software. They make money by charging for other services such as technical support, additional features, becoming a member of MySQL network, etc.

Pros Development speed: people using the system do not have to wait for the owner/developer to make corrections to the software, anybody can do it. Lower financial aspect: with the speed of correcting bugs in the system, companies will capitalize on not having to wait for the owner/developer to fix the problem which will potentially save the company money. Closeness to the customer: many times the software works, but is not perfect. This means that customers are able to provide feedback and change parts of the software they do not like. The customer is able to help customize the program to what he or she needs or wants. Broader market: since suggestions can be made by anyone, several companies might take the time to use open source in order to adapt the software to their needs and wants.

Cons Poor integration with Microsoft: often times the creators of open source products do not want to work with Microsoft, so instead become a competitor. Can be difficult to use: many times programs are written by engineers and this makes it difficult for the general public to understand. Higher cost of operation: the initial software may be free, but often times additional training is needed to operate these programs – making them cost more than closed source software Higher cost of technical support and updates : many times the initial software is free, but if the customer wants updates or technical support, they must pay for those services. No warranty: With open source the customer is on their own. Usually there is no single company backing the product.

The Cathedral and the Bazaar This is a collection of essays compiled by Eric Raymond in 1997 and it has been a staple for people in the IT field. It was published and freely redistributed over the internet which allowed anybody to learn about “a whole new way of doing business”. It outlines the main principles of the open source movement. This brought about a new idea that software could be developed by collaboration and free information sharing, software did not have to be monopolistic and done through closed source.

The Cathedral and the Bazaar The idea for the title literally came from the concept of a cathedral and a bazaar. A cathedral is enclosed and does not allow influence from the outside world. When relating this to open source, it means the cathedral is closed source and does not allow people’s inputs outside of the company. Many times software is developed in a hierarchal structures and this links to the Catholic religion.

The Cathedral and the Bazaar A bazaar is an open market where anyone is allowed to come and purchase items. This concept links to open source because a bazaar permits anyone to evaluate, use, and improve the software which offers constant feedback.

Future The number of users of open source systems such as Linux has increased dramatically over the years which will threaten Microsoft’s monopoly Many believe the future can be summarized with the three C’s (commodity, customized, and collaboration)